The Michigan garnishment process results starts with a judgement from your creditor and progresses into taking money from your paycheck.
Having money garnished out of your paycheck, checking account or even out of your tax refund can have devastating effects on your finances. Suddenly the funds you needed to pay your mortgage, utilities or car payments have evaporated. How can a creditor do this? How can you stop it? Read below to understand the process of obtaining a garnishment in Michigan and how you have the power to stop it.
How does a Creditor Obtain a Garnishment in Michigan?
In order to pursue a garnishment, a creditor must first obtain a judgment. A judgment is a court act creating or affirming a debt obligation. After 21 days of getting the judgment, the creditor can file a “Request and Writ for Garnishment.”
Once signed by the court, this Request and Writ is served on the “garnishee”. A garnishee is someone who has control over money that is paid to the creditor such as an employer, bank, tenant or Department of Treasury. This must be served within 91 days. Upon receipt, the garnishee must serve a copy on the debtor within 7 days and make a “disclosure” to the court and parties within 14 days about any money of the debtors that they control.
If money is available, it will be withheld from the debtor right away. However, this money is held for 28 days to allow the debtor time to file objections. If there are no objections, the withheld money will be automatically sent to the creditor at 28 days.
What Can a Creditor Garnish and How Much Can They Take?
The most common forms of garnishment are:
- Wage Garnishment: 25% of your net pay can be taken each pay period until full payment is made for the judgment amount plus any subsequent late fees, interest charges and legal fees.
- Bank Account: Your creditor has the right to garnish your entire bank account to satisfy the judgment.
- State Income Tax Refunds: Your state tax refund can be completely given to your creditors year after year until the judgment debt and subsequent fees are fully satisfied.
The bottom line is that once a garnishment is in place, you are not in control of how and when your creditors get paid. Take back to the control by filing a Chapter 7 fresh start to eliminate the debt altogether or a Chapter 13 debt consolidation plan to set up a repayment plan on your terms and ability to pay.
Get Debt Resolution
Dealing with judgments and subsequent garnishment can seem overwhelming. Don’t ignore the problem, as it will only be compounded once you begin losing money – funds that you may need to pay living expenses and legal fees to resolve the situation. We help clients legally stop garnishments by eliminating the debt with a Chapter 7 or consolidating the debt with a Chapter 13.
Chapter 7 Bankruptcy, A Fresh Financial Start
Chapter 7 bankruptcy will immediately stop the garnishment process in whatever stage it is in and legally eliminate the debt. The benefits of this approach:
- Immediate court protection;
- Legal elimination or discharge for ALL unsecured debt obligations such as credit card bills, medical bills, personal loans, loan and repossession deficiencies, etc.
Chapter 13 Bankruptcy, Debt Consolidation
Filing a Chapter 13 bankruptcy will also put an immediate stop to a garnishment. The purpose of this program is to:
- Consolidate debts into one affordable payment.
- Prioritize debts to make sure the most important things get paid first (mortgage, vehicle, living expenses, etc.) before worrying about payments to unsecured creditors such as judgments, credit cards, second mortgages, medical bills, personal loans, etc.
- Pay what you can, eliminate the rest. The Chapter 13 plan only requires that you make your “best efforts” to pay back your unsecured debts, the rest is legally eliminated at the end of the 36 – 60 month repayment plan. We propose the budget to the court based on your actual expenses. The plan is customized to your circumstances and can be adjusted throughout the program.
- 0% interest on repayment of any unsecured debts.
- Legal protection from creditors and any creditor actions such as home foreclosure, vehicle repossession, etc.
- Opportunity to remove a second mortgage or home equity loan to reduce overall mortgage debt and/or reduce the principal mortgage balance owed on a rental property.
+ Reducing principal debt to improve your debt-to-income ratio or leverage;
+ Resuming consistent and timely payments to your creditors;
+ Stop late reports to the credit reporting agency via court protection.
We Can Provide Same Day Legal Protection
This is fixable and we are here to help. Better yet, if you have already had money withheld or even turned over to your creditor in excess of $600.00 within the last 90 days, we can get the funds back for you.
If you are facing a garnishment or are even just in the stage of a creditor pursing a judgment, don’t delay and find a lasting solution. We offer free phone and in-office consultations on how to best deal with a judgment and/or garnishment and move toward financial freedom. Please call us toll free at 866-261-8282 or click here to schedule a consultation right now. Acclaim Legal Services has office locations in: Detroit, Southfield, Warren, Dearborn, Ann Arbor, Flint, Michigan.